Attention Economy


Friday, June 23, 2017

Politics and Trade Protectionism

The US sugar industry offers a cautionary tale of the ill-effects arising from trade protectionism:
Harvard economist Jeffrey Frankel notes:
“Such actions benefit American sugar producers – particularly a small group of wealthy sugarcane growers, largely in Florida, who offer generous campaign contributions to the relevant politicians. For example, the Florida-based Fanjul brothers, Alfonso and José, reportedly contributed a half-million dollars to Trump’s January inauguration. US Sugar has also recently donated generously to Florida Governor Rick Scott.
But the high US sugar prices – double the world price level, on average, over the last 35 years – sustained by protectionist trade measures hurt American consumers, who face an estimated $3 billion per year in added costs. And such measures harm US industries that need sugar, with economic costs that outweigh the benefits of a more profitable domestic sugar industry.”